The following Editorial was published in the Antigua press May 17, 2019 and should be of interest to the BU family and wider community. The author is a pilot.
-David, Blogmaster
Mottley, Gonsalves and Shareholders Plot a Course for LIAT’s Free Fall
The following Editorial was published in the Antigua press May 17, 2019 and should be of interest to the BU family and wider community. The author is a pilot. -David, Blogmaster
46 responses to “Mottley, Gonsalves and Shareholders Plot a Course for LIAT’s Free Fall”
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Barbados Says Yes To Selling LIAT Shares
May 19, 2019Prime Minister Mia Mottley of Barbados has said yes to selling “a significant portion” of Barbados’ shares in Liat to the government of Antigua and Barbuda.
Prime Minister Gaston Browne made the disclosure on his radio programme over the weekend, indicating to listeners that Mottley recently responded to an offer to sell the shares.
Barbados is the largest shareholder government in LIAT.
Browne did not give an exact number but said Mottley indicated that Barbados wanted to retain “at least 10 per cent of its shares.”
“The intent is not to exclude any country from participating in LIAT. In fact, as far as practicable we would want to broaden the shareholding in LIAT,” the prime minister said.
He added that he was “quite happy that they will maintain a shareholding position.”
A negotiating team has been established to include MP’s Lennox Weston and Sir Robin Yearwood as well as a representative from the ministry of finance.
Barbados is also expected to name a negotiating team.
Antigua proposes to take on Barbados’ liability at the Caribbean Development Bank related to a LIAT loan in exchange for the shares.
He said the decision was in the best interest of the economy.
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“Antigua proposes to take on Barbados’ liability at the Caribbean Development Bank related to a LIAT loan in exchange for the shares.”
I believe Mottley should have held a town hall meeting to allow tourism stakeholders and average Barbadians to offer their opinions before making the unilateral decision to “exchange” 90% of Barbados’ shareholding in LIAT to Antigua.
But I also noticed that White Oaks fees included the preparation of a restructuring plan for LIAT.
Is it coincidental that immediately after the IMF visit, Mottley decides to “exchange” Barbados’ shares in the airline to Antigua?
Was the “exchange” influenced by the IMF?
Since Mottley made the decision, perhaps she should have “exchange” Barbados’ entire shareholdings……. and hold a position on the airline, similar to that of St. Lucia’s PM, Allen Chastanet.
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The following excerpts were taken from today’s (Sunday, May 19, 20019) edition of “Barbados Today:”
“Barbados will not be negotiating LIAT’s future direction in the public domain, Prime Minister Mia Mottley has reiterated, in response to reports out of Antigua and Barbuda that her Government has agreed to sell its shares to St John’s.”
“Speaking on his radio station on Saturday, Antigua and Barbuda’s Prime Minister Gaston Browne said Mottley has said yes to selling “a significant portion” of Barbados’ shares in LIAT to his government.”
“This afternoon, Prime Minister Mottley’s Press Secretary Roy Morris confirmed that Barbados had received the letter but made it clear that Mottley would not be drawn into making public comments on the matter.”
“PM Mottley’s position is that Antigua has made an offer to Barbados regarding its shares in LIAT, and Barbados has responded by inviting [Prime Minister Gaston Browne] to send a team to Barbados to talk,” Morris told Barbados TODAY.
“In the meanwhile, Barbados will not prejudice those talks by making any further statement on the matter, ” he added.”Why is Mottley “tight lipped” about the negotiations if, according to Gaston Browne, she decided on the Antigua proposal?
Or has Browne made a “presumptuous assumption.”
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The airline business is at the best of times an “iffy” business, so many have come and gone that they could fill a book. When an airline is run by Gov’t (never mind the Board) it will be run like any other Gov’t run utility- a license to lose money. To all intents and purposes Antigua already controls Liat and the Barbados Gov’t might as well make it official- it isn’t as if it’s a Bank that holds the deposits of many Bajans.
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@ Sargeant
I agree with you.
Barbados should sell all its shares in LIAT.
What I’m seeing ahead is Gaston Browne wanting to extort money from the other shareholders to keep Antiguans employed at LIAT.
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If a decision was taken to sell why would Mottley not issue a statement?
If the decision was taken to sell why would Brown make an announcement and Mottley not do same if there was a mutual understanding about disclosure?
So confusing.
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In light of the possible sale the content of the editorial is now moot?
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At least that is a start towards off loading a boondoggle off the backs of barbados tax payers
Govt can find the means to keep people employed
Liat measures up to years of financial waste
Govt role in to stay in their lane not to become owners of business entities of which they know nothing
It is akin to economic madness
Hopefully sooner rather than later a light bulb moment would shine opening govt eyes to another reality of off loading the blood sucking Hilton Hotel -
I agree with the PM on this move 100 percent. I would sell the entire share in it and not keep not even a small shareholding. LIAT will never be a profitable investment for us so let it go.
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Hilton is blood sucking?🤔
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@Goren
When you sell LIAT what is the downside? Are we assessing every transaction with economic considerations attached?
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David you think too much
The islanders carried on very well by other means of airlines before Liat
This Liat idea is borne out of showmanship having a underlying fact that govts have no business engaging in aviation
Stick to what they no which so far as seen by the poor performance of their economies they know nothingYes and i say get rid of Hilton
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Forgetting sentiment look at the facts.
We are the largest single shareholder yet the hub is located in Antigua
We prop up most of the cash injection as we are the largest shareholder, yet we don’t even benefit from LIAT using here as a real layover point for crew ,even though we inject 49 cents out of each dollar to keep it in the air.
There is no sound financial argument from an investment standpoint to be a shareholder in LIAT. It does not make money, nor will it ever make any, as it’s not run as a business but a political football.
Madam PM I urge you to sell every share in it and let the debt load be removed from our foreign debt liability. For sake of clarity though let’s call the transaction a redirecting of debt as a sale implies an injection of cash.
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@John A
If we were interested in headquartering/hubbing LIAT in Barbados should we have been more diligent in acquiring CAT 1 status for Barbados? We live to talk.
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David that is a question for those that were around to answer I agree. The thing is we are not in a financial position to own an investment that is nothing but a drain on our cheque book, those days are gone. You and I know that as long as 4 different owners sit at the table to carve a ham, each owner is looking for the biggest slice. We will lose nothing by selling LIAT, the owners will continue to supply us with airlift as we are a high traffic destination. You know when this government does foolishness I am the first to bark at them, likewise when they make a move based on financial logic I will support them hands down!
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@John A
Understand the binary position you have taken, a reminder nobody banged us over the head to purchase the debt when others defaulted that led to the majority holding position we have today.
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David that’s true and those that bought it did not base their decision on financial prudence then either. I know their is alot of sentiment on this topic but we are not in a position to make anymore decisions based on anything but financial prudence.
Let’s look at it another way then. Let’s say we were throwing 20 million dollars a year into LIAT and getting no return, can we agree by offloading LIAT we should be at least 20 million dollars better off after the 1st year of selling the shares?
Ok let’s keep that ” profit” for lack of a better word in mind, as a 50% shareholder in LIAT for the sake of easy calculation, you then have to agree LIAT would have to move from losing millions, to making a net after tax profit of over $40 million dollars in the next 12 months for us to get the same return as offloading today.
Doable maybe in Wonderland, in a practical world though and given its track record highly unlikely. I got To go with the PM on this one and SELL.
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No where have your factored the leadership role Barbados has played and continue to play in the integration movement? Is this an effort we can attach a quantitative benefit?
Please do not mention Caribbean multinational facility.
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Yes I know Barbados has played its role in integrating the islands but at what price? In good times maybe we could turn a blind eye to such financial drains but not today and not drains of this magnitude.
Suppose the government said they would take all the money saved by exiting LIAT and buy 40 new busses and 10 new garbage trucks with it, would that make it more palatable?
For the record that is 10 new garbage trucks out the USA at around $139000 USD Each not the $600000 ones I had heard talk bout! LOL
I know this is a sentimental topic but we can put that annual loss and liability from LIAT to way better use in BIM today. It’s a case of home drum got to beat first this time around unfortunately.
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The corollary to your position is that the region represents a significant trade area, given the size of the domestic market the value of the regional common market cannot be underestimated. We cannot manage our affairs as if we were in a bubble.
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David BU
You are “all over the place” trying to defend the undefendable…… something that is not justifiable by any type of argument.
I agree with John A that Barbados should sell or “exchange” it’s entire shareholdings in LIAT to Antigua. As John A correctly mentioned, although Barbados is a largest shareholder in the airline, Antigua “calls the shots.”
Gaston Browne went “behind the backs” of the other shareholder islands PMs and negotiated a deal with Virgin Atlantic’s Sir Richard Branston. He also developed a plan to restructure LIAT, after which he said he would present the details by month-end (May).
Why should Barbados continue to invest in LIAT, when there isn’t any real ROI and our taxes are basically keeping Antiguans employed at LIAT?
St. Lucia’s PM Chastanet has vowed not to invest the St. Lucian taxpayers’ funds in LIAT until the airline has been completely restructured. St. Kitts & Nevis, Guadeloupe, Martinique, Tortola, St. Maarten, St. Croix, St. Thomas and Puerto Rico have not invested in LIAT, but benefits from its services.
Why should Barbados be any different?
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As majority shareholder in LIAT we have had Chairman Jean Holder as a fixture and other representatives seated on the Board. What leadership has Barbados exerted over the years on the airline which might have led to the state of affairs we find ourselves today? There is enough blame to go around.
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True and that is why i say sell as no chairman changes, management changes, changes of aircraft, route changes etc etc have ever resulted IN LIAT showing a profit. Let’s just accept the fact that water don’t flow up hill and offload. Some battles ain t worth fighting and this is one of them.
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LIAT was never setup to make profit. The mission was to support regional travel as a public good. What is happening with LIAT is symptomatic of a crisis in leadership in the region, a lack of vision and inability to execute. Whatever decision is taken the issues of the day will not be solved. Success domestically is intricately meshed in the success of the region.
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But David if we adopt that view then we should drop bus fare to 50 cents and say it was set up to provide island wide travel from St Lucy to Christ Church regardless of the cost to the state. If it doesn’t make money it should at least not cause the state to bleed to death.
Sorry that argument can’t hold up to scrutiny, wheel and come again.
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@John
You are trivializing the point. It can be setup as a public good, this does not remove the responsibility from those with management/fiduciary responsibility from executing effectively and efficiently.
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No not at all, I am bringing it to a practical conclusion based on economic reality and long term liability to a shareholder that can no longer have a portfolio with money losing investments in it. I agree with all you say about social and regional development, it just doesn’t outweigh the cost of ownership under our financial reality. That sadly is what it has boiled down to now for us.
We can however agree to disagree as that is what makes discussions like these interesting.
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@David. I am not sure if a CAT 1 status is relevant for LIAT operation in the CARICOM region per se. Antigua requires a FAA CAT1 rating only because LIAT flies into Puerto Rico.
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@fortyacresandamule
How can we effectively manage an airline from Barbados if we do not have the latitude to plan routes into N. American controlled territory? Who is to say FAA procedures will not extend into others areas of operating an airline in the future? Are there not other benefits to a CAT 1 destination for the hub coiuntry?
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LIAT along with Cayman Airways and Bahamas Air all lose money annually. Even legacy carrier, Caribbean Airlines, is propped up to some degree by the government of T&T. Air Jamaica had only turn a profit once or twice in its 43 years of operation.The airline business is not for the faint of heart. Some government keep their legacy carriers because of prestige, multiplier effect on their economy, isolated location, and traffic flow, especially, for their tourism industry.
However, sometimes a cheaper model of owning a legacy carrier, especially, you are worried about visitors arrival, is to buy seating arrangement on airlines flying into your destination.
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@fortyacresandamule
Agree with all you have written EXCEPT that regional governments have committed to a position LIAT is one of the vehicles necessary to promote regional integration. If we want to dismantle this ideal then say so.
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@David. You are correct. Yes, if BIM was to become an aviation hub, a CAT1 rating would be a must. Also, I agree, since other jurisdictions have adopted the FAAA CAT1 as their standard, it’s not unreasonable to assume that further in the future this might be the norm in the region.
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De ole man is a simple man bereft as I am of verbal competencies and academic sojourn
In short, me English ent too good cause i ent went school long.
School was dun for de ole man at 12.
Barefoot and bedraggled de ole man has wandered into life.
But like the optic section in the brain of a blind man, it morphs into something else and augments other sensory processes so too did my reasoning skills.
Artaxerxes quotes the following article from Mugabe’s Press Secretary whom some call a rapist, I Doan know
“…PM Mottley’s position is that Antigua has made an offer to Barbados regarding its shares in LIAT, and Barbados has responded by inviting [Prime Minister Gaston Browne] to send a team to Barbados to talk,” Morris told Barbados TODAY.
“In the meanwhile, Barbados will not prejudice those talks by making any further statement on the matter, ” he added…”And then Artaxerxes the Superlative Researcher asks the question
“…Why is Mottley “tight lipped” about the negotiations if, according to Gaston Browne, she decided on the Antigua proposal?…”
De ole man gine answer all dese questions dat is troubling all of wunna and for which wunna does not have the answers.
Mugabe Mottley is lost for initiatives to jump start the Barbadian economy.
The country has lost its financial attractiveness to the international investor community AS A RESULT OF HER BATTLES WITH THE INTERNATIONAL CREDITOR COMMUNITY.
In short White Hoax having real problems convincing anyone about anything AND MUGABE MOTTLEY IS PISSING SHE SELF.
She CANNOT MAINTAIN THIS FACADE LONGER THAN 18 MONTHS!!
But she cannot force international creditors to take a haircut
With them it will mean “…A fvcked up debt restructuring proposal by the inept White Hoax can deepen this debt crisis not only for years but for decades.
Mugabe hos suddenly realized the the Premiership of the Republic of the Dual Islands of Barbados is not as easy as she thought.
and with wunna spiteful bajans nipping at shd heels with all this negative Social Media Activity wunna causing de poor woman much problems.
as a result, the immediate return to normal economic activity is going to be majorly delayed.
add to that the fact dat Mugabe ent got no real real plan, OTHER THAN THE IDEAS OF A PARTICULAR FELLER who she trying to lock up for 2 years and then try for Treason, she recognises that all she BERT AND ERNIE PLANS WILL BE DELAYED!!!
Heheheheh.
Concommitantly, all her credit market access IS GOING ON LOCKDOWN, trade finance IS OBVIOUSLY unavailable, capital flight WHICH WE HAVE SEEN FROM THE DLP ERA OF MISMANAGEMENT IS endemic, THE INTERNATIONAL COMMUNITY ABDICATING THEIR LOCAL PRESENCE, and foreign direct investment diminishing at a rapid rate…”
So to bring all this together for you sheeple and people Mugabe is buying time and selling the family jewels in the interim to keep afloat for the protracted Credit Negotiations with her foreign debtors.
And during that time she does not want Antigua to broadcast the $$ that she is going to be getting from the sale BECAUSE GHE CREDITORS WILL GET WIND OF THIS and it will fvuck up her spree!!
I going change me name to “Piece the Legend Explains” cause I realize dat some of wunna really slow as shy$e though
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@ the Honourable Blogmaster
De ole man has explained this issue and it is in suspense here. Grateful if you retrieve it for the readers please
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A happy Good Morning to the visionary..
Seem as if your are punching above your weight (again) 🙂 -
Chairman should have been fired longtime for his benchwarmering has be ineffective
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@ the Honourable Blogmaster your assistance please with an item of drivel here
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Stuuupse, more drivel.
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“And during that time she does not want Antigua to broadcast the $$ that she is going to be getting from the sale BECAUSE GHE CREDITORS WILL GET WIND OF THIS and it will fvuck up her spree!!”
PUDRYR
PM Gaston Browne made an offer for Antigua and Barbuda to ACQUIRE the LIAT shares owned by Barbados, through a take-over of the liability of Barbados to the Caribbean Development Bank (CDB).
Since “money will not be passing in the deal,” how does your above comments fit “in the grand scheme of things?”
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@ Artaxerxes the Archives par Excellence
When I acquire your shares or your shareholdings are you telling me that you are the sort of man that, in relinquishing your shares, LIKE OWEN DID WITH THOSE IN THE BARBADOS NATIONAL BANK, you will be prepared to give them to me WITHOUT ANY MONEY PASSING HANDS?
Is it as simple as that? just a swapping of names on a document and whaplax?
If it is as simple an activity as you are leading de ole man to believe WHY INVITE DE MAN HERE TO DISCUSS ANYTHING?
JES SIGN DE PAPER OVAH TO GASTON!!
You see why i admit to being word impaired and deficient in shool attendance quotas?
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Demerara Waves
May 20, 2019“Guyana unlikely to pay hefty guaranteed subsidy to LIAT; will remain on regional schedule after restructuring.”
Guyana is not expected to pay a huge guaranteed subsidy to the Antigua-headquartered regional airline, LIAT (1974) Limited because a significant number of travellers continue to fly to and from this destination, an airline spokesman said Monday.
The disclosure was made even as Barbados indicated that it was willing to sell its shares in the cash-strapped regional carrier that serves the Caribbean from Guyana in the south up the island chain to the Dominican Republic in the north.
LIAT’s Corporate Communications Manager, Shamar Maloney told an interactive session with travel agents and the media that talks were continuing with the Guyana Civil Aviation Authority (GCAA) about implementing the minimum revenue guarantee.Maloney said the guarantee was not fixed across all LIAT destinations, but instead varies based on a “break-even” load factor. He said only countries that fall below the load factor would have to stump up the guarantee “to ensure that the flights are operating”.
Guyana is among 11 of the 15 destinations that have been asked to pay the guarantee, but Maloney was quick to point out that Guyana would not have to pay a large amount of money. “In terms of getting that load factor, I know that I can say, based on last year’s number, that Guyana would not have to pay for most months of the revenue guarantee. We know Guyanese love to fly,” he said.
Latest available figures show that LIAT moved 80,000 passengers to and from Guyana in 2018, with an average load factor of 69 percent, and of the 20 percent of travel agencies that account for 80 percent of LIAT’s revenue, six are based in Guyana. The data also shows a 20 percent annual growth of passenger traffic.
Several Caribbean governments pay a number of extra-regional carriers to continue flights during the off-peak season when there are fewer tourists visiting the region.LIAT’s Head of Sales and Marketing, Egbert Riley told the session that airline’s revenue has been growing over the past three years, but the major challenge has been the carrier’s operational cost. He said Guyana was “really up there” in terms of social media interactions and engagements, passengers, revenues from travel agencies. “Without a doubt, Guyana is very important to us. In terms of growth, you guys have grown tremendously over the last three years…I think it’s probably the market with the most potential in the region right now,” he said.
Riley boasted that LIAT’s on-time performance has been rated among the highest in Latin America and the Caribbean due to its ongoing restructuring programme. “We do expect some changes because the reality is that LIAT has been under a programme of restructuring for quite some time,” he said.
He disclosed that a technical team was currently in Guyana to put systems in place to route all calls, including those to its 1-800 toll free number, to the regional airline’s call centre in Antigua. E-mail alerts about flight changes, he said, were already being provided to passengers and that would be complemented by a text messaging service.
Meanwhile, teaming up with the Antigua and Barbuda Tourism Authority, Riley was among LIAT officials who touched down in Guyana to hammer home the point that Guyanese should not worry about whether they would be left behind especially during the upcoming peak period. “Even if LIAT changes, LIAT is not going to stop flying to Guyana; that’s for sure and we see ourselves as an important partner,” said the LIAT Sales and Marketing boss.
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@ Artaxerxes
I see and stand suitably corrected.
My bias against these DBLP thieves shows.
I distrust them with every cell of my being Artaxerxes
Notwithstanding my rationale as it relates to the 18 month window Mugabe still stands.
That is irrefutable
That she will be looking at ways to bolster Forex in a market where
The country ent producing and exporting nuffin
And
There are assets the country can sell to augment her NON EXISTENT ECONOMIC RECOVERY PLAN Mugabe going do it
So expect medicinal marijuana and casinos 🎰 soon AND MORE KILLINGS
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Based on the foregoing even if Barbados disposes of its share in LIAT it will still have to fork over a subsidy to keep it afloat and/or to ensure that it is still serviced by LIAT (that last part is unsaid but one can tread between the lines). It’s a no- win situation but the PM has indicated that Barbados is open for business and Caricom nationals are welcome to work and play, LIAT will get them here.
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@Sargeant
The PM indicated today in a press conference she will not discuss the details of the transaction until the time is right. In fact she rapped Gaston Browne on the knuckles for his disclosures so far. No wonder Caricom and the integration effort is a mess.
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But why is Mottley wanting to be secretive about the all but done Liat deal
She ought to be the last person to be condemning Browne on his forth rightness on the Liat deal
Wasn’t Mottley up front and centre telling all she knew about govt engagement with Cahill
Wasnt Mottley the one always touting Transparency
Apparently after May24th she burnt the book on Transparency
What a bold faced hypocrite
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